Wet Summer Dampens Sales at Bid Target Sainsbury

Supermarket group J. Sainsbury, the subject of a 10.6 billion pound ($22 billion) proposed bid, saw its growth slow in the second quarter as Britain's wettest summer on record dampened spending.

Sales at its stores open at least a year rose 3.1% excluding fuel in the 16 weeks to Oct. 6, slowing from 5.1% growth in the first quarter.

In what could be Sainsbury's last quarterly trading update as a listed company, total sales excluding fuel rose 4.7%, broadly in line with analyst expectations.

Wednesday's second quarter figures are unlikely to affect Sainsbury's share price, with the market's focus on Qatari group Delta Two's proposed bid and the shares already trading close to the 600 pence offer price.

Sainsbury, like British retail leader Tesco which reported interim figures last week, saw its summer business suffer after torrential rains and flooding lashed Britain during June and July. The latest numbers are also set against strong 6.6% growth in like-for-like sales in the second quarter last year.

Sainsbury is in the third week of due diligence by Delta Two prior to any bid and several analysts have said they expect a formal offer could be launched as early as this week, in the face of saber-rattling by the Sainsbury family.

The supermarket's founding family, who hold an 18% stake in the group, are planning to try to block Delta Two's bid if it fails to strike a deal with the pension trustees, a source familiar with the matter said on Tuesday.

The family torpedoed a bid by a private equity consortium in April but are considered to hold less sway this time around because the Qataris behind Delta Two already own 25% of Sainsbury's shares, making them its leading shareholder.